Social Entrepreneurs and Large Corporation Partnerships. An Investigation of Mutual Value Creation through Different Partnerships
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INTRODUCTION 6
Relevance of the Study 6
Research Questions 8
1. THEORETICAL BACKGROUND 9
1.1 General Concepts. Social Entrepreneurship and CSR 9
1.2 SE/LC Partnership Types 18
1.3 Value Creation in SE/LC Partnerships 20
1.4 Challenges of SE/LC Partnerships 22
1.5 Summary of the Chapter 25
2. RESEARCH METHODOLOGY 27
2.1 Research Design 27
2.2 Research Method 27
2.3 Methods of Data Collection 29
2.4 Chosen Partnership Cases and Companies for the Interview 30
2.5 Research Limitations 31
3. RESEARCH FINDINGS 33
3.1 LC/SE Partnerships Analysis 33
3.2 Partnership Matrix. Activity and Commitment 35
3.2.1. Primary, Secondary, Extraorganizational Activity 36
3.2.2. Low, medium, high commitment 38
3.3 Partnership Matrix. Types of the Partnership 40
3.4 Mutual Benefits from the Partnerships. Model BIR-ISS 44
3.5 Challenges in the LC/SE Partnerships 46
4. CONCLUSION 52
4.1 Discussion of Research Findings 52
4.2 Theoretical Contribution 53
4.3 Managerial Implications 54
4.4 Limitations and Opportunities for Further Research 54
REFERENCES 55
Appendix 1. Questions for Interviews with Social Entrepreneurs (English) 64
Appendix 2. Questions for Interviews with Social Entrepreneurs (Russian) 65
Appendix 3. Questions for Interviews with Representatives of Large Companies (English) ..67
Appendix 4. Questions for Interviews with Representatives of Large Companies (Russian)..69
Relevance of the Study 6
Research Questions 8
1. THEORETICAL BACKGROUND 9
1.1 General Concepts. Social Entrepreneurship and CSR 9
1.2 SE/LC Partnership Types 18
1.3 Value Creation in SE/LC Partnerships 20
1.4 Challenges of SE/LC Partnerships 22
1.5 Summary of the Chapter 25
2. RESEARCH METHODOLOGY 27
2.1 Research Design 27
2.2 Research Method 27
2.3 Methods of Data Collection 29
2.4 Chosen Partnership Cases and Companies for the Interview 30
2.5 Research Limitations 31
3. RESEARCH FINDINGS 33
3.1 LC/SE Partnerships Analysis 33
3.2 Partnership Matrix. Activity and Commitment 35
3.2.1. Primary, Secondary, Extraorganizational Activity 36
3.2.2. Low, medium, high commitment 38
3.3 Partnership Matrix. Types of the Partnership 40
3.4 Mutual Benefits from the Partnerships. Model BIR-ISS 44
3.5 Challenges in the LC/SE Partnerships 46
4. CONCLUSION 52
4.1 Discussion of Research Findings 52
4.2 Theoretical Contribution 53
4.3 Managerial Implications 54
4.4 Limitations and Opportunities for Further Research 54
REFERENCES 55
Appendix 1. Questions for Interviews with Social Entrepreneurs (English) 64
Appendix 2. Questions for Interviews with Social Entrepreneurs (Russian) 65
Appendix 3. Questions for Interviews with Representatives of Large Companies (English) ..67
Appendix 4. Questions for Interviews with Representatives of Large Companies (Russian)..69
Each year, the broader environment of global economics expands by emergence of new and witty ideas, implementation of which help innovative companies to grow and become wealthier in comparison with their competitors. However, with right government and societal structure, society too can gain benefits from timely and useful ideas, and by reaping this opportunity, it may grow and improve the lives of people in it.
The main issue with present business-being is that today no fresh idea is found without toll: large companies, in the constant search of original ways to gain an upper hand over their rivals, employees of large corporations are working overdue, resources are large, but they are not used effectively. Overall, this intensity is often destructive as for the organizations and their workers, as for the society at large. Unbridled market forces, in combination with other global trends, are also jeopardizing Earth's life-support systems, potentially limiting humanity's possibilities for long-term progress (Asrar et al. 2019).
For this reason, it is a crucial task for academicians to find a method or concept which may be applied and used to generate new ideas, and moreover, which can be put to an effective use by the most powerful part of global economics - large corporations. This method may be found in the cooperation of large corporations and social entrepreneurs, even though this collaboration is intuitively unobvious there are several features and growth options to consider if we speak about these entities.
To start with, there are several things to be said about social entrepreneurs. Social entrepreneurs are the change agents, they adopt an aim to make and deliver social value, pursue this mission, find innovative ways to achieve this objective. Social entrepreneurs can be innovative, as for them to be viable it is necessary to create unorthodox ways of operating, thus producing sustainable innovation, and to be stable they need to do it constantly. So, in the nutshell, social entrepreneurs theoretically contain profound opportunities to generate innovative and creative ideas.
Social entrepreneurship (SE) has grown in importance as a study topic for businesses and academics (Rey-Marti et al., 2016b). Several challenges, such as poverty and human welfare, have prompted a number of companies to do business with a social purpose (Huda et al., 2019). Social entrepreneurs do not expect immediate monetary advantage from their social initiatives. Every enterprise, according to Bygrave and Minniti (2000), has a social purpose; nevertheless, SE differs from traditional entrepreneurship in that its primary aim is to create social benefit rather than private economic profits (Pless, 2012; Mair et al., 2012a).
Large Corporations, on the other hand, are not so entrepreneurial and innovative, but they can scale up and cultivate any innovation, they also have a need for innovative ideas in transitional periods to be feasible in the long run (Charter et al., 2008). Large corporations are the companies that have been consistently successful in gaining profits and presenting new products to the market, that is why they have large pools of resources, which along with the need to be at the top of market can give a chance for life for new and promising projects.
To sum up, there are obvious potential options in partnership between LC and SE, as it can bring not only monetary value for organizations, but also have a grand societal effect. We can notice that social entrepreneurs, with their creative thinking in the field of sustainable innovation and lack of resources, can be a perfect match to large corporations with grand financial and infrastructure power and strong desire to be profitable in the new economic reality, where sustainability and social recognition are definable. This partnership can bring a lot of use to all sides, but this issue is not fully developed and inquired, and thus it needs to be explored.
Cross-sector partnerships (CSPs) are collaborations involving organizations from at least two distinct societal sectors (e.g., business, government, and nonprofit) in the pursuit of economic, social, and environmental well-being (Bryson et al., 2015; Selsky & Parker, 2005). Such collaborations frequently address large-scale, persistent, and 'wicked' problems that cut across sectors and are thus difficult to tackle from inside a single sector, because problem-solving capacity is intrinsically constrained.
The potential partnership between Social Entrepreneurship and Large Corporations can bring both the monetary and societal value, which can be achieved through the entrepreneurial nature of SE and vast resources of LC. However, it may be done only with thoughtful approach from all sides of this collaboration. There is also a misconception about main notions of social entrepreneurship and social innovation, as well as with the system of large corporations and their interaction with invention and later innovation, this topic should be inquired better. (Driver, 2012) In addition, the mechanics of such partnership are not researched well, and there is little information of how impactful this cooperation would be. This issue is forthcoming as many companies are moving through transition periods and need meaningful innovations. And so, this is crucial to find out how this transition can be passed successfully with such cooperation. (Moss, Short, Payner, & Lumpkin, 2011; Di Domenico, Tracey, & Haugh, 2009)
By all aforementioned, we define research problem as the need to explore the mechanics of creation of societal and economic value in LC - SE partnership, which will allow this creation to be perpetual and sustainable. Thus, we can define the research gap as the lack of exploration on the topic of such partnership and the topic of social entrepreneurship as the source of competitive advantage in academic and non-academic sources....
The main issue with present business-being is that today no fresh idea is found without toll: large companies, in the constant search of original ways to gain an upper hand over their rivals, employees of large corporations are working overdue, resources are large, but they are not used effectively. Overall, this intensity is often destructive as for the organizations and their workers, as for the society at large. Unbridled market forces, in combination with other global trends, are also jeopardizing Earth's life-support systems, potentially limiting humanity's possibilities for long-term progress (Asrar et al. 2019).
For this reason, it is a crucial task for academicians to find a method or concept which may be applied and used to generate new ideas, and moreover, which can be put to an effective use by the most powerful part of global economics - large corporations. This method may be found in the cooperation of large corporations and social entrepreneurs, even though this collaboration is intuitively unobvious there are several features and growth options to consider if we speak about these entities.
To start with, there are several things to be said about social entrepreneurs. Social entrepreneurs are the change agents, they adopt an aim to make and deliver social value, pursue this mission, find innovative ways to achieve this objective. Social entrepreneurs can be innovative, as for them to be viable it is necessary to create unorthodox ways of operating, thus producing sustainable innovation, and to be stable they need to do it constantly. So, in the nutshell, social entrepreneurs theoretically contain profound opportunities to generate innovative and creative ideas.
Social entrepreneurship (SE) has grown in importance as a study topic for businesses and academics (Rey-Marti et al., 2016b). Several challenges, such as poverty and human welfare, have prompted a number of companies to do business with a social purpose (Huda et al., 2019). Social entrepreneurs do not expect immediate monetary advantage from their social initiatives. Every enterprise, according to Bygrave and Minniti (2000), has a social purpose; nevertheless, SE differs from traditional entrepreneurship in that its primary aim is to create social benefit rather than private economic profits (Pless, 2012; Mair et al., 2012a).
Large Corporations, on the other hand, are not so entrepreneurial and innovative, but they can scale up and cultivate any innovation, they also have a need for innovative ideas in transitional periods to be feasible in the long run (Charter et al., 2008). Large corporations are the companies that have been consistently successful in gaining profits and presenting new products to the market, that is why they have large pools of resources, which along with the need to be at the top of market can give a chance for life for new and promising projects.
To sum up, there are obvious potential options in partnership between LC and SE, as it can bring not only monetary value for organizations, but also have a grand societal effect. We can notice that social entrepreneurs, with their creative thinking in the field of sustainable innovation and lack of resources, can be a perfect match to large corporations with grand financial and infrastructure power and strong desire to be profitable in the new economic reality, where sustainability and social recognition are definable. This partnership can bring a lot of use to all sides, but this issue is not fully developed and inquired, and thus it needs to be explored.
Cross-sector partnerships (CSPs) are collaborations involving organizations from at least two distinct societal sectors (e.g., business, government, and nonprofit) in the pursuit of economic, social, and environmental well-being (Bryson et al., 2015; Selsky & Parker, 2005). Such collaborations frequently address large-scale, persistent, and 'wicked' problems that cut across sectors and are thus difficult to tackle from inside a single sector, because problem-solving capacity is intrinsically constrained.
The potential partnership between Social Entrepreneurship and Large Corporations can bring both the monetary and societal value, which can be achieved through the entrepreneurial nature of SE and vast resources of LC. However, it may be done only with thoughtful approach from all sides of this collaboration. There is also a misconception about main notions of social entrepreneurship and social innovation, as well as with the system of large corporations and their interaction with invention and later innovation, this topic should be inquired better. (Driver, 2012) In addition, the mechanics of such partnership are not researched well, and there is little information of how impactful this cooperation would be. This issue is forthcoming as many companies are moving through transition periods and need meaningful innovations. And so, this is crucial to find out how this transition can be passed successfully with such cooperation. (Moss, Short, Payner, & Lumpkin, 2011; Di Domenico, Tracey, & Haugh, 2009)
By all aforementioned, we define research problem as the need to explore the mechanics of creation of societal and economic value in LC - SE partnership, which will allow this creation to be perpetual and sustainable. Thus, we can define the research gap as the lack of exploration on the topic of such partnership and the topic of social entrepreneurship as the source of competitive advantage in academic and non-academic sources....
Social entrepreneurship and large corporations’ partnerships may indeed become one of the most powerful tools to create innovative business models and promote more inclusive and fair economy through the right types of partnerships and collaborations.
The primary goal of the research was to define the various forms of partnerships between large corporations and social enterprises, as well as to define the mutual benefits, which can be gained by both parties in the partnership. For these tasks, almost one hundred cases of the partnerships between large corporations and social entrepreneurs were categorized and analyzed.
First of all, we have determined what are the different types of partnerships between social entrepreneurs and large corporations, for this we have looked on the several categories by which we differentiated between different cases of such partnerships.Categories have spanned throughout the main aspects of the partnership including regularity, resource commitment, activity etc. The last two criteria have made the basis for the extraction of distinct groups of partnerships. Resource commitment and activity has created the Partnership Matrix - the intersections of this matrix have constituted the distinct forms of partnerships.
Based on the matrix, 8 types of the partnerships were found: Philantropic Partnership, Sponsor Partnership, Client Partnership, Alert Partnership, Golden Mean Partnership, Balanced Partnership, Semi-Synergetic Partnership, Synergetic Partnership.
The first 5 types are the flexible partnerships, implying, that they require relatively low or medium levels of resources and commitment and are made for the small and medium social impact partnerships; the last 3 types are integrative partnerships, they require higher commitments and generally are more fit for the partnerships with wide social impact.
After the types of partnerships were found, the analysis over the mutual benefits has helped to widen the perspective on LC/SE partnerships. The suggested abbreviation BIR-ISS covers all mutual benefits, that both social entrepreneurs and large corporations can achieve in the partnership. It helped to answer the question on what are the mutual benefits that can be gained by both parties from the SE/LC partnerships. This abbreviation recognizes that there are 6 big categories of values generated in the partnership. First three letters BIR - are the group of values that can be gained by large corporation, these are Business values, Innovation values and Reputation values. The last three letters - ISS put an emphasis over the values gained by social enterprises. Those are Impact, Survival and Scale. The combination of these categories show how much value can parties gain from the partnerships, the full abbreviation symbolize the highest possible benefits, whereas other combinations are also possible.
The final question of the research was to find the challenges, that both large corporations and social enterprises face while they are partnering for a social good. Businesses and non-profit organizations from many sectors working together on social and environmental concerns encounter not just conflicts of corporate ideals and views that mirror wider cultural trends, but they must also overcome peculiarities in order to create long-term trust and comfort (Ashraf et al. 2017). Institutional complexity is a significant aspect of social partnership and a foundation for possible shared advantages; at the same time, it is one of the tension sources that leads to cognitive dissonance and failure of organizational expectations (Villani et al. 2017).
We have conducted interviews to find the challenges that are met in the practice of the social entrepreneurs and large corporations. We determined that communication issues, bureaucracy of companies, unprofessional behavior are the biggest challenges in the cross-sector partnership. These findings support the academic literature, as all of these challenges are the consequences of considered in the literature incompatibility of institutional logics, organizational complexities and governance. Therefore, the interviews prove that indeed these issues are persistent and important.
4.2 Theoretical Contribution
In the theoretical domain, the research extends the existing typology of partnerships between social entrepreneurs and large corporations. The partnership matrix complements the continuum model of Austin and supports the existing categorizations of the social partnerships. . Austin (2000) has viewed cross-sector partnerships as a continuum ranging from the fully philanthropic to "integrative" partnerships, in which the two sides enjoy organizational integration; and to full cooperation, in which values, objectives, people, and activities are all combined. Austin and Seitanidi (2012) also argued, the expansion of MNC/NPO collaborations has resulted in the emergence of a fourth position on the cooperation continuum: transformative partnerships. The overarching purpose of this increased collaboration is to co-create meaningful societal transformation.
The developed typification extends the continuum model of Austin, as the suggested types of partnerships explain the transactional phase of the continuum and expand other phases differentiating between different states of partnerships on each stage. In essence different types of partnerships are concise with various stages at the continuum model.
The abbreviation BIR-ISS also complement the existing models on value creation - the IVC and CVC frameworks, as it helps to categorize outcomes - created values from the analysis of IVC and CVC paradigms. Research also supports the previous literature on the specific challenges, that social entrepreneurs and corporations face in the partnership and proves, that the main problems still lie in the domain of competing logics and power asymmetry, which underlie the emerging conflicts and discrepancies.....
The primary goal of the research was to define the various forms of partnerships between large corporations and social enterprises, as well as to define the mutual benefits, which can be gained by both parties in the partnership. For these tasks, almost one hundred cases of the partnerships between large corporations and social entrepreneurs were categorized and analyzed.
First of all, we have determined what are the different types of partnerships between social entrepreneurs and large corporations, for this we have looked on the several categories by which we differentiated between different cases of such partnerships.Categories have spanned throughout the main aspects of the partnership including regularity, resource commitment, activity etc. The last two criteria have made the basis for the extraction of distinct groups of partnerships. Resource commitment and activity has created the Partnership Matrix - the intersections of this matrix have constituted the distinct forms of partnerships.
Based on the matrix, 8 types of the partnerships were found: Philantropic Partnership, Sponsor Partnership, Client Partnership, Alert Partnership, Golden Mean Partnership, Balanced Partnership, Semi-Synergetic Partnership, Synergetic Partnership.
The first 5 types are the flexible partnerships, implying, that they require relatively low or medium levels of resources and commitment and are made for the small and medium social impact partnerships; the last 3 types are integrative partnerships, they require higher commitments and generally are more fit for the partnerships with wide social impact.
After the types of partnerships were found, the analysis over the mutual benefits has helped to widen the perspective on LC/SE partnerships. The suggested abbreviation BIR-ISS covers all mutual benefits, that both social entrepreneurs and large corporations can achieve in the partnership. It helped to answer the question on what are the mutual benefits that can be gained by both parties from the SE/LC partnerships. This abbreviation recognizes that there are 6 big categories of values generated in the partnership. First three letters BIR - are the group of values that can be gained by large corporation, these are Business values, Innovation values and Reputation values. The last three letters - ISS put an emphasis over the values gained by social enterprises. Those are Impact, Survival and Scale. The combination of these categories show how much value can parties gain from the partnerships, the full abbreviation symbolize the highest possible benefits, whereas other combinations are also possible.
The final question of the research was to find the challenges, that both large corporations and social enterprises face while they are partnering for a social good. Businesses and non-profit organizations from many sectors working together on social and environmental concerns encounter not just conflicts of corporate ideals and views that mirror wider cultural trends, but they must also overcome peculiarities in order to create long-term trust and comfort (Ashraf et al. 2017). Institutional complexity is a significant aspect of social partnership and a foundation for possible shared advantages; at the same time, it is one of the tension sources that leads to cognitive dissonance and failure of organizational expectations (Villani et al. 2017).
We have conducted interviews to find the challenges that are met in the practice of the social entrepreneurs and large corporations. We determined that communication issues, bureaucracy of companies, unprofessional behavior are the biggest challenges in the cross-sector partnership. These findings support the academic literature, as all of these challenges are the consequences of considered in the literature incompatibility of institutional logics, organizational complexities and governance. Therefore, the interviews prove that indeed these issues are persistent and important.
4.2 Theoretical Contribution
In the theoretical domain, the research extends the existing typology of partnerships between social entrepreneurs and large corporations. The partnership matrix complements the continuum model of Austin and supports the existing categorizations of the social partnerships. . Austin (2000) has viewed cross-sector partnerships as a continuum ranging from the fully philanthropic to "integrative" partnerships, in which the two sides enjoy organizational integration; and to full cooperation, in which values, objectives, people, and activities are all combined. Austin and Seitanidi (2012) also argued, the expansion of MNC/NPO collaborations has resulted in the emergence of a fourth position on the cooperation continuum: transformative partnerships. The overarching purpose of this increased collaboration is to co-create meaningful societal transformation.
The developed typification extends the continuum model of Austin, as the suggested types of partnerships explain the transactional phase of the continuum and expand other phases differentiating between different states of partnerships on each stage. In essence different types of partnerships are concise with various stages at the continuum model.
The abbreviation BIR-ISS also complement the existing models on value creation - the IVC and CVC frameworks, as it helps to categorize outcomes - created values from the analysis of IVC and CVC paradigms. Research also supports the previous literature on the specific challenges, that social entrepreneurs and corporations face in the partnership and proves, that the main problems still lie in the domain of competing logics and power asymmetry, which underlie the emerging conflicts and discrepancies.....
